New Auckland Mayor, Wayne Brown, has released his first draft proposal for the Auckland Council Group’s Annual Budget 2023/2024.
The Auckland Council Group is made up of Auckland Council; the four council-controlled organisations (CCOs): Watercare, Tātaki Auckland Unlimited, Eke Panuku and Auckland Transport: and Ports of Auckland Limited (POAL).
The proposal includes significant reductions in council spending to help balance the budget, but also a range of measures such as increasing general rates, prudent use of debt and the sale of assets to combat some extraordinary economic conditions, Council said in a statement today.
Auckland Council Group Chief Financial Officer, Peter Gudsell said the Council was facing the consequences of a rapid rise in inflation and interest rates, which are severely affecting operating costs and financial forecasts.
“In such an uncertain economic environment the budget enables the council to respond to conditions as they change. These challenging economic conditions mean the proposed annual budget needs to close an estimated operating budget gap of $295 million for 2023/2024, as well as continue to counter the ongoing impact of a new economic reality,” he said.
“This means some tough decisions need to be made, to both address the council’s immediate operating challenges and also provide for more structural ways to ensure a financially sustainable council in future years.
“Staff advice to the mayor provides cost savings options to address our near-term operating position, while making sure Auckland Council looks at the shifts we need to make to become a simplified, efficient, and service-oriented council.
“As an organisation and across the council group, we need to make sure we are focusing on delivering the services Aucklanders need and value and delivering these efficiently.”
Auckland Council Chief Executive, Jim Stabback said the key to the budget was ensuring there was flexibility to manage the challenging economic conditions the council faces.
“With each of the options used to close the budget gap, there are both short and long-term implications, but using the range of proposed measures available, provides a credible and sustainable plan that manages the risk of having to use any one option excessively. For example, if only the rates option was used without reducing our operating costs, general rates would have to rise more than 13 per cent to fund the budget shortfall,” said Mr Stabback.
“In developing a balanced budget, it is important that this balance includes reducing impacts to ratepayers and users of our services as we recognise that households and businesses are also feeling the pinch.
“What we’re looking at is an approach that sets us up sustainably for the future, living within our means and delivering well on what we are tasked with doing, including our climate change responsibilities.
“This will have an impact on some of our services, programmes and investment in the community, and therefore also on our workforce but it is a necessary response to the cost increases we are facing.
“Staff impacts will be carefully managed with a focus on redeployment and managing staff numbers through attrition where possible,” he said.